JG Summit to shut down electronics subsidiary

The Gokongwei-owned JG Summit Holdings Inc. will close down its wholly-owned electronics manufacturing unit Cambridge Electronics Corp. (CEC) next month, a company official informed the Philippine Stock Exchange yesterday.

JG Summit corporate secretary Emmanuel Rojas Jr. said the company’s board has authorized the cessation of CEC’s plant operations effective July 11.

Although Rojas did not give other details on the closure, a company source said the move is part of JG Summit’s continued efforts to streamline and rationalize its diverse business interests, with the non-core, non-profitable ventures put on the chopping block first.

Barely a week ago, JG Summit shut down the Manila Midtown Hotel, a unit of its property subsidiary Robinsons Land Corp., due to poor business performance.

CEC is one of the supplementary businesses of the JG Summit group whose core holdings consist of branded consumer foods, property, telecommunications, petrochemicals, textiles, air transportation and financial services.

CEC manufactures three types of printed circuit boards (PCBs) at its plant facility in the First Cavite Industrial Estate in Dasmariñas, Cavite, about 35 kilometers south of the Ninoy Aquino International Airport.

In 2001, CEC turned in revenues of P835.4 million, an increase of 35 percent from the previous year and has expanded its capacity to 280,000 square feet per month of outer layer and 50,000/sq. ft. of inner layer PCBs – an integral component in computer devices and other electronic items.

The company has been exporting to the US and European markets, but over the past years, the global slump in electronics demand as well as fierce competition from other PCB makers has resulted in continued losses for the company.

Unlike the Manila Midtown property which can be redeveloped into a more lucrative commercial and/or residential complex with its strategic location at the heart of Ermita in Manila, the CEC leased plant facility at the Cavite ecozone can be sub-leased or sold outright to interested investors.